Judge greenlights sale of bankrupt Olga's Kitchen assets

Olga's Kitchen in One Campus Martius closed in September, three months after entering into Chapter 11 bankruptcy protection.

A federal judge Tuesday approved the sale of the bankrupt assets of Olga's Kitchen Inc. to an affiliate of Livonia-based Team Schostak Family Restaurants, offering the chance to rejuvenate the slumping restaurant chain.

U.S. Bankruptcy Judge Walter Shapero's order came four days after the affiliate, SOK Venture LLC, won an auction for Olga's assets with a $10.95 million bid plus a $305,596.33 payment to creditor Sysco Corp.

SOK plans to close the sale by Dec. 11.

"We are very happy with the court's ruling, and my client is excited about the opportunity to revive the Olga's brand," SOK attorney Joseph Sgroi said.

SOK agreed in October to acquire 15 restaurants independently operated by Olga’s Kitchen and the 11 restaurants owned by a joint venture between SOK and Olga's Kitchen's OKI LLC, according to a filing in U.S. Bankruptcy Court in Detroit.

"It has been a long process, but with the cooperation of all of the parties in interest, we were able to come up with an agreed to process to sell Olga's to maximize the distribution to its creditors," Olga's attorney Robert Bassel wrote in an email. "The purchaser of Olga's is familiar with the business because they own 11 of the stores with Olga's, and everyone in Detroit wishes them success to continue the brand started in the 1970s by Olga Loizon."

The judge's order largely caps a high-profile bankruptcy case filed in June that followed a bitter legal fight and allegations of a years-long campaign by owner Robert Solomon and others to strip Olga’s restaurants of cash for his own benefit.

The key issue remaining in the bankruptcy case is distributing sale proceeds to secured creditors.